let's bring you up to speed. moody's investment services cut its rating on spain, lowering it down to baa-3 from a-3. that's just above junk territory. as a result, the yield on spain's ten-year, hitting 7% just about an hour ago. 6.971%. this is the level that is so key, because 7% has been where other countries have had to seek help from the eurozone. we'll have more from ross in london in just a few moments. in the meantime, treasury secretary tim geithner speaking about the eurozone trying to keep it together last night at the council on foreign relations. >> from talking to them and listening to them over the last 2 1/2 years of crisis, my view is they consider this carefully and they've decided that it is in their interest to hold it together. and what they say to us privately, they will do whatever

is necessarily to hold it together. >> again, though, with those spanish yields hitting 7% on the ten-year, that it's ras an awful lot of questions. geithner saying 2% growth is not enough to get americans back to work. he says the most helpful thing washington can do is extend middle-class tax cuts and remove the threat of default. we get a report on jobless results at 8:30. let's talk corporate headlines. cell phonemaker nokia cutting 10,000 jobs and warning that a second quarterly loss from its cell phone business will be larger than expected now. the company says it will take restructuring charges of $1.3 billion. dick clark products, the producer of the golden globes and the new year's rocking eve. redskins owner red zone capital

bought dick clark products for $175 million five years ago. there's a lot of intrigue behind this sale. we'll talk about it in a little bit. and a panel of outside advisers has give a thumbs up to an artificial heart valve. it can be inserted without cracking open the chest for surgery. we'll keep an eye on that stock today. >> sounds painful. let's check on markets this morning. the futures, take a quick look, up ten points. not a whole lot happening. we have a lot to deal with today. didn't turn out well yesterday. worries about europe finally did cause the market to succumb to that pressure. let's check out the things that make a difference this morning like energy, oil, 82.56. we had a good auction in our country and the ten-year has been between 1.5 and 2% for a while or 1.61%. finally, the dollar, the dollar

board, we'll take a quick look at. 1.25 on the euro and then gold is down about -- just thinking about the way your story was written, becky. you said you were going to a tim geithner -- i expected him to almost be breaking down in tears. >> europe trying to hole the union. >> you said here's tim geithner talking about europe, trying to keep it together. >> i watched to see him breaking up. >> that would make sense at this point. >> i thought he'd be breaking into laughter. >> no. it's not good for us. when we get a chance, becky, you come in, have you read the front page of the journal completely? >> yes. >> which part? >> six pounds of bacteria are on you or -- >> i know. it's creepy. >> what if they're counting lice -- i don't know who they

picked. >> the bacteria, some of it is good for you. >> but six pounds? six pounds? >> stop. i can't -- >> when i worked in research, we used to make e. coli. you use it to clone and for plasma. you'd put it in a vat and centrifuge it to get the medium off it. it's the grossest -- but six pounds. i think they used one of the guys on our staff to get 6 pounds. you know which one i'm talking about? >> no. >> i think a normal person has one point or so and then there's guys like pig pen. >> who we don't know. we're all offend. >> as well they should be. >> as well they should be. did you read the lance armstrong story. >> i have always thought this. >> can we talk about this for half a second? we have not talked about this. >> no, we haven't.

>> i don't want to get involved. >> do we believe he was doping or not. >> yes, i do. that's just me, my opinion. i see the michelob commercials and say are you stupid, as a corporation, why are you still -- you know, they said they can get by with it because of the last probe. you saw landis. >> call me naive, pollyanna, whatever, i'm hoping this is wrong. >> are you surprised by this. >> i'm still so naive -- >> you ask him one question and he gets so sanctimonious, to even bring it up. i'm not a fan. i'm sorry. i'm not a fan. it's hard -- >> cancer. >> yes. it's hard to say anything because of that. >> and because he has been -- >> we can move on. i'm sorry. there are other things going on in the world, perhaps even more important things. >> in fact, let's get to our global markets report. ross westgate is standing by in

london. that 7% level that the ten-year in spain hit earlier had all of us kind of sitting on the edge. >> trying to keep it together. >> joe trying to keep it together. >> i'm having a hard time. >> what are the implications? all red behind you this morning. >> you have to remember, this is what happened to italy. it is worth reminding ourselves back in november, italy bond yields went up to 7% level. we had a big, 2s and 5s were higher. that results, of course, in berlusconi and a change of government but the yields did come down. it wasn't terminable. at that time, a lot of people said that's it, italy is out of the bond market. a lot of people were worrieded about that. we have the bank loan due to be happening for the spanish banks. we have to wait and see. just because we broached through

it, doesn't automatically mean this will happen to spain either. it's not just, of course, the issues in spain. there's a lot of nervousness heading into the weekend in greece. there's certainly that layer that is playing into these high yields as well. a lot of people are seeing this as a big event risk as we all know. so if there's an election result, which is okay, then those traders are saying you could see yields falling 30, 40, 50 basis points at the beginning of next week. that's if there is a result which enables greece to stay in the eurozone for a little bit longer and to get some kind of rethink on the bailout programs. that's what the bond traders are saying at the moment. it's a mixture of spanish -- spain's own dynamics and this greek election event. we've been off a percent across the board. the futures are flat in the united states.

a little bit around about 8-1 decliners outplacing advancers. losses right now, 0.8, 0.9, 0.8 for the french market. the ibex is flat. moody's downgrading the country to a status just above junk as well. but they've also come out with -- we've had estimates that have come out and suggested that the bank recapitalization on the amount of loans they need is 60 to 65 billion euros, less than the 100 billion capability that is being talked about. we've had already an italian auction today. yields in italy sharply higher, particularly at the three-year level. we had auction yields, 5.3%. they were under 4 3rers, 3.9% for similar auction in italy for three-year money in mid-may. sharply high per the key point was they raised the full amount they wanted, 4.5 billion.

they got the money they wanted, yes, yields were high. that auction was seen as well. it was okay, not bad enough to extend the sell pressure. there wasn't a huge reaction because they got the money away, albeit high yield. spain at the moment just below the 7% data. french yields are higher, 2.73%. it's been interesting. since the advent of the government, how french yields got lower. a lot of people have been talking about how even if you saw them rising, we hit 1.14 on june 1st. well are wondering whether they are starting to price in whatever happens in the eurozone. if the whole things breaks up, costs in germany will go up anyway. we're keeping an eye on bund

yield trade. opec leaders meeting in vienna as the price of crude trade sits near eight-month lows now. let's get to kelly evans who is covering the get-together in vienna. kelly evans standing by. where are you exactly there? >> andrew, get this, i am in front of the hoffburg palace in vienna which was once the seat of the roman empire. it's beautiful here, it's windy, though. what's happening inside is the opec seminar, ahead of the opec meeting that will be held across town. the saudi oil minister, he's the key character. he's the greenspan-like figure in all of this. and the decision that may come from the meeting later largely depends on whether the saudis can come to a meeting of minds with everyone else in the dozen

member cartel. cartel being a term they hate to use. you have iran, algeria, venezuela who would like to see production cut. the saudis, though, appear open to having a production increase or stay at current levels of about 31.5 million barrels a day. that is above the 30 million barrel ceiling they agreed to in december. it seems likely they may stick to the 30 million barrel figure when the statement itself comes out later. naimi didn't make comments on camera. we did hear from the libyan oil minister. interesting story. we asked him about production levels. take a listen. >> do you support lowering production levels from the 30 million barrels a day? >> i think we're in the market of supply and demand, not for the sake of lowering production but having a stabilized price is the issue. >> would you prefer to see prices stay at current level? >> $100 i think is reasonable.

>> yes, $100 a barrel, that's above where brent is right now. gives you a sense of when people talk about stabilizing prices, they mean let's reign is in to support that. arab spring is about 1.5 barrel a day. it wants to get to 3.5 million in five year's time. the most likely thing to come of today's meeting is that we stick to the 30 million target according to a lot of people familiar with the discussions. there have been closed-door sessions which may mean we get a quicker outcome tonight instead of it dragging into tomorrow. probably no decision on the next secretary general yet either. >> i heard you talking on "worldwide exchange" about how some of the iranians were storming down the hall in some of the meetings yesterday. does that suggest there is still tension about whether to stick to the 30,000 or 30 million and is that telling -- what does that tell us about the state of what's going on behind the

scenes? >> yes, i think, look, the situation with iran is for them, the higher oil prices will be one way of putting pressure on people. becky, what's interesting, we have the "wall street journal" reporting that the saudis and iranians in closed-door meetings have agreed to stick to that $30 million ceiling. that being the case, maybe that could help a quicker outcome of the meeting. having seen the mood of some of the delegates yesterday, it doesn't niecely seem as though the meeting of the minds necessarily lifted spirits. >> kelly, thank you very much. and thank you for the update. we'll check in again a little later. >> i kind of want to be there. >> that's beautiful. >> it does look beautiful. the $100 oil wasn't as beautiful. >> we think $100 oil is reasonable. >> they love money. they love rolexes, they love sticking it to us, too if they

figure we can stand 100 they wish it was there. only time they worry about it is when we can't. >> let's talk about jamie dimon, the day after his testimony. i was there, we all were talking about it before the show. there's been a lot of commentary today. i was happy. in many ways these things turn into political theater. i thought the questions were respectful and many of them were trying to seek real answers as opposed to grandstanding. there were a couple of grandstanders. merkley moment. >> they were trying to get at real answers. i thought jamie dimon did a good job for what he was trying to do. i don't think we necessarily got

any new answers, meaning there was no great revelation. the club acts was a new note, the thought that they're likely to do that. there was misinformation provided to the regulators. what does that mean? people will talk about that. mayor thompson, there was a memo. i'm sure there will be more talk about that. look, i don't know how big a deal that ultimately is either. i do think there was a missed tune, something talked about on cnbc.com overnight. this idea that we still haven't got to the root of whether this trade was a hedge or proprietary question. >> he said the intent was not nefarious, therefore, intended to be a hedge. having changed that --

>> he is he absolutely not. >> excuse me? >> he said it was perfectly legit. >> he said volcker hadn't been written yet. he said he did not know. he said he did not know. >> steve was doing reports yesterday on our air saying, yes, it has been written, laid out and there should be clears and you should be able to know it. he said he den didn't think that jamie dimon had read it. >> if you were expecting -- i was not expecting him to do that either. >> he's very good. people that haven't seen him before, must think this guy is really good at what he does, i think. >> i'll say two things. one i think he made a nice dividing line on volcker. this is still the big discussion about market making and

portfolio hedging. he was very insistent on that. i thought he left a little bit of wiggle room on this idea of portfolio hedging which is where this problem happens. i think we'll see more on that. i think two years from now. >> he was not as strident. in the past he's been outright strident. >> blankfein is a good ceo, too, but isn't quite as media savvy. a lot of times blankfein looked confu confused. >> he looked at them when he thought they were stupid questions. >> to sit in sank tctimonious,

pompous judgment. i want to us have a hearing on their 17% approval rating and $2.3 billion deaf st. and not having a budget in the last four years and when merkley tries to say, we don't have a budget. i want to say, i'm the one interviewing, you shut up, little man. the way he treated me. it's going to get worse. >> it's going to get worse. >> most of them are in there for two years. >> the senate banking committee actually knows what they're talking about. >> i will say this, in a year or two from now, we will look back at this, a great leadership lesson. you will look at jamie dimon. ultimately as much blood lust there is -- >> i wanted to say it again because i believe it. >> excellent.

history being made on the baseball diamond. willie mays made the catch. now, san francisco giants pitcher, a perfect game. the first in the franchise's storied history. he struck out 14 astros. they won the game 10-0. that is pretty amazing. due up next inning on "squawk box," some heavy hitters from cnbc will take a swing at fixing the crisis in europe. they'll try and keep it together. stay right her, more "squawk box," next. [ crunches ] mmm. [ explosion ] [ crunches ] [ explosion ] [ crunches ] [ explosion ] [ crunches ] [ explosion ] [ male announcer ] pringles... bursting with more flavor. buy 4 cans of pringles, and get your speaker... ♪ [ cheering ] ... to turn up the flavor!

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we're we're back on thursday morning. a crucial moment looming for europe this weekend as the greek election looms, what plan of action do european leaders need to take to solve that ongoing debt crisis? in our very own cnbc summit, michelle caruso cabrera, steve liesman and simon hobbs set out to find that answer. take a listen. >> they consolidate the process underneath the imf and this allows for a cover for leadership. >> you have eurobonds. that has to be the end game. >> the ultimate way to stabilize the debt market is for these countries to prove they can grow. >> what makes me crazy, we've been through this in the united states. the idea of a big bazooka will stabilize markets and allow for the things you want to happen to

occur. >> michelle caruso-cabrera will be tapping in during the next hour. >> let's take a look at the markets. we missed yesterday's -- now i think you have something to hide. you don't want people to -- that used to know you -- what happened? you have a bad trade or something? what's with the facial hair? >> are you talking about the beard again? >> i am. >> no one's mentioned your hair in a long time. it's all focused on my beard. it's real. it's real. >> i know it's real. yesterday we finally succumbed to the european pressure, i guess. >> yes. >> we have greece coming up. i've seen, almost at this point it's almost hackney, a lot of investors say for the next month i wouldn't touch anything. is that a reasonable appraisal

of where we are? >> as an investor, yes. again, that sort of middle time frame is kind of what's gray. in the short term there's a lost opportunities, i think. i mean, the s&p individual stocks are moving sideways. crude is at sort of an inflection point, copper's at sort of an inflection point. i'm kind of an if then trader. i need to see what happens before i know what i'm going to do. on the equities i'm leaning long. i think for stock pickers it's a great market you have the right time horizon. financials look good in the u.s. over the long term. there are so many issues. i can't get away from this idea that a more consolidated europe, especially watching the german bond yields rise. the negative real yields in germany to me were a play on breakup of the euro and the appreciate you would get in a deutschmark. it seems like they are going to lock germany in to be on the

hook for some of the problems and that creates a negative feedback loop in the markets. >> it certainly is a great wall of worry. you can paint all kinds of scary scenarios over the next month or so which i guess gives you the answer to why the market seems cheap in terms of earnings and dividend yields and everything else. if you wait for all these things to be resolved, all issues, a lot of times you don't get the best prices. to stand in front of this would take some nerve, i think. >> it's a great point. i think what people have to realize in this type of a market, i'm on my 19th year of doing this, 20th year. with the gray in my beard you can tell it's probably a little bit longer than that. >> i think that's bacteria. 6 pounds on a normal person, i think you might have 15 or 20. >> what did you have for lunch yesterday? >> if you come closer with the

camera, you'll be able to tell. >> maybe scrambled eks or something. >> i don't think anyone should be looking to pick bottoms in their entire investing career. i liken it to a hot air balloon. you want to jump into one that's going up. if you have the right time horizon and have the time, invest in them. >> if you're going to pick your nose, pick your nose first. >> mark eliminates have been incredibly calm about the 7%. the spanish bond yields are at 7%. ross is right. >> it reminds me of the old terrorism scares. it happened, it was a huge reaction, then we came back and it just goes like that. it gets less and less and less, the reaction, i mean. >> thank you. when we come back, how worked up should investors get about the spanish yield and the greek elections? we'll continue that discussion

right after this. new england patriots on bob kraft and their sons, they'll be guest hosting today. and they are bringing friends, including rock icon jon bon jovi. as we head to a break, take a look at yesterday's "winners and losers." optionsxpress, where you can trade your favorite products,

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good morning and welcome back to "squawk box" here on cnbc, i'm joe kernen along with all my bacteria and becky quick and andrew ross sorkin. we have two guests. >> there's 32 pounds of germs. >> 30. >> 30? >> yes. >> six times five. >> for those of you who don't know what we're talking about, go read the front page of "the wall street journal." >> we expect people to be prepared to watch the show in the morning. >> we believe they start watching at 6:00 and don't stop until 9:00. >> and hopefully avoid "the new york times." greek bank stocks are up sharply, traders betting on the pro bailout parties are likely to win elections this weekend,

although the guy had an op-ed in the financial times, the guy that runs the other party and said there's no way i'm going to let us leave. >> they said even if he wins, they're going to come and accept the concessions and say, yes, we'll come to the table. no matter what happens, they'll renegotiate it and they'll have better terms at the end of it. >> when we talk to machiichelle caruso-cabrera, she's in athens. >> there's not a whole lot of euros left. >> did you see that in the last week? i'm not going to use the "r" word. i won't say that. >> ixnay on the unray. >> zip it. it's gone. nokia, the handset maker will be cutting another 10,000 jobs as it tens to restructure.

it's also warning that the second quarter loss will be wider than preef grousely expected to be. >> join is us right now is the principal at douglas lane and associates. michael strauss who is chief economist at common fund. and lay it out for us right now. why is the market reacting so calmly, the stock market, to these bond yields in spain, the ten-year touching at 7% today? that's normally a point when people say that's the point of no return. markets shrugging it off today. >> i think what you're seeing, firstly, we've had this story a couple years in a row. a lot of the bad news is also discounted. you're looking forward to the next three weeks where you have a bunch of meetings in greece and the eurozone is getting together. the markets have discounted a lot of this. you're selling at 12 times earnings. companies are flush with cash, global in nature, yes, you have 5%, 10% exposure to southern europe but it's a global

economy, you have growth in most of the world. the markets unlike last summer when all of a sudden you had 500 point swings because of the uncertainty and who's going to go, we know in the next couple of weeks we'll get some decision. it's too early to decide whether to sell now and buy later. the volatility is still there. everything is correlated. >> that makes me feel better but that's not to say we couldn't come in on any given morning and see the futures down 200 points or something. >> you could have 200 points down and in the afternoon you could have a swing 200 points up, or the other way other, depending on what way greece sneezed or did spain decide to say something. at least get some type of decision where the markets will say is europe going to get its act together. what you're getting then is the discount on the multiple of earnings. >> michael, a big question is whether or not the euro contagion in terms of the

economy there, is something that spreads. how immune are we from any significant downturns in europe's economy? >> i think you have to look at what's happened already so far this year, the separation of markets. u.s. markets are up a bit. you look at spain, they're down 25% to 30%. that's different than a couple of years ago. i think the market is being more rational in recognizing that the european problems are a greater issue for the southern european countries. europe as a whole, including germany, will have to pay the of the could of this, whether it's keeping everything together or the cost of a breakup, which is a significant cost. and in the u.s. side on the overall exposure for u.s. companies is about 10% to europe. domestically there are good things going on that people are sometimes forgetting. the housing sector is clearly turning. we clearly have seen a change in the industrial sector. the other thing is, the moderation of energy prices that

we've seen in the last several months will ultimately help buildup discretionary savings or discretionary spending. we will get some benefit and more importantly, central bankers around the world. here particularly in the emerging markets will ebenefit. the potential of getting continued step up easing moving out of the central bankers in the emerging world is going to be something that fosters a little bit better growth in those countries. >> oil prices, isn't that a situation that oil prices are weaker because we're worried about the contagion effect. if we're not being dragged down, do oil prices come back up? >> not really. people were fearing a bad event in the middle east in the middle of the year. that has not happened. global supplies of oil, products, in some parts of the world, including the u.s. are plentiful. at some cases at the highest

levels in 15, 20 years. that probably suggests we may get bounce off the lows in oil. we're probably not going to 110 for u.s. crude oil prices for 125 for european crude oil. >> if you're taking this view, then eventually we will have some sort of an answer. we'll see decisions that come through. would you be telling people to buy every time the market dips? >> absolutely. we are long-term invested. we think the next three to five years will be much better than what we've seen in the last three to five years. when you talk about the input prices in oil because of fracing in north dakota, the midwest. we look at different sectors. we just don't think there's another demand and the supply is great. that helps i don't you in industrials and in a loot of other sectors where the consumer has more money and we want to put money into those sectors. >> is 12,500 a dip? >> given the volatility you

could be down a thousand points in the next two ek woos. given specific valuations on companies, yes, this is time to add more if you have more cash or stay invested. it's going to be volatile, no question. when you look down three to five years, some of the stocks growing 10% a year but trading at 12, 13 times earnings, you'll get rewarded for that. >> appreciate it. thank you. if you have comments or questions, send us an e-mail, squawkbox@cnbc.com. and still ahead, he fought the law and guess what, the law won in this case. billionaire allen stamford hears his fate. find out how many years in prison he'll be facing for ripping off thousands of investors. "squawk" returns after this. >

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welcome welcome back, everybody. the u.s. equity futures at this hour are up by about 35 points. the s&p futures up by just over 4. that's significant because at this point the market seems to be shrugging off concerns in the bond markets in europe. spanish debt yields on the ten-year rising and touching 7% this morning. but at this point, equity markets don't seem to be all that concern. in our headlines, former billionaire allen stanford could receive one of the longest white collar sentences in u.s. history today. he faces up to 230 years in prisons to running a $7 billion ponzi scheme. and prosecutors are urging the judge to give him the max. and the jury in the insider trading case of former goldman sachs director raj gupta is

expected to begin deliberations today. okay, big question. where do world's biggest investors turn to get advice on where to put their money? we have the money on set with the answer. his name is eric hirsch, from hamilton lane, the chief investment adviser there. where are you telling the biggest investors to putir money. >> private equity is continuing to track a lot of money. people continue to struggle with where they're seeing public equity returns. >> question on private equity and the idea that it's powering the returns. why do we think the private equity is so uncorrelated to the markets when effectively they're in the same businesses, we're just adding leverage? i read so many different reports that say just add a little bit of leverage to the s&p 500 and

you can do the same thing. >> the numbers don't bear that out. you have seen correlation. we benefit from a lack of mark-to-market on a daily basis. you take some of the emotion out of the market and that helps. private equity, it's the ability to add marketability at the portfolio level. the leverage impact is relatively da diminimous. >> you tell them in this horrible time, realistic number is what now? >> i think private equity has been realistically delivering net, net, net, mid to high teen returns. >> still? >> still. >> i can see if the stock market has not had great returns that it makes private equity look all the better just in terms of a great place for your investments. but eventually, the markets being weighed down would seem to

me they would have an impact on private equity. it's the way you eventually turn around and get your returns back by taking things to market. >> yes. >> how long can the markets be like this before it affects private equity, too. >> i think for the really big lbos that were done in '06 and '07, they can't get liquid. they're struggling to get the capital back out. the flip side is that corporate america is sitting here with record amounts of cash on balance sheet. they need and want to spend it. they have been a big acquirer of midsize and smaller private equity deals. private equity guys doing the hard work, cleaning up the broken businesses, making them look better and delivering them back into the public markets. >> is the politics of the moment, i'm talking about the romney campaign and all of the noise we hear around private equity, is that a conversation you're having with one of the public pension funds? is that impacting investment decisions or at least how the thinking is going? >> we would probably all happy to have less publicity around

the asset class right now. there's been no shortage of conversation. you go to a union board, these people are not in the markets every day. they see what they read about job cutting, mitt romney, et cetera. it's a big topic of conversation. >> have you advised somebody you should be allocating "x" to private equity and getting an answer back when they say we can't do that right now? >> absolutely some people are making decisions around sort of politics and sort of the current temperament in the market. >> who's done that, for example? >> you've seen a couple of the union funds do it. they've been under real pressure as to where they put their capital. >> we look at what people get paid. recently i think there is almost a perception that ceos are overpaid because maybe they're not as good at what they do as we've been told or maybe they're not worth the money. is it possible one of the reasons these guys in private

equity have these returns, is it possible, are they good at doing this? or if they're not good, do they fall by the way side and not able to stay in business? >> private equity has benefitted from a much better alignment of interest model. the lp gives the gp money, we go in and buy a company together. >> we're told they lever it up and take big dividends. i hear that -- i mean, that question is coming, right? they lever up companies, pay themselves, take big dividends. how is that assigned with the company or employs' interest? >> on the dividend side of it, those businesses are often coming back to -- they lever businesses prudently in most cases. the company actually has great earnings. they actually delever and then they relever again and take themselves out. i don't think that's an inprudent approach to this. the management company is getting paid at exit when we are also as the lp exiting. that's different in the stock market as we all know. >> but it's possible you can have crappy management in some company -- >> absolutely.

>> they're really bad and you can have private equity guys that have been doing it a long time and have turned companies around in the past. >> yes. >> and actually know how to run a business, come in, turn the business around and everybody is a winner. we don't believe that anymore. we think everybody is mediocre, because our favorite banker turns out to not have seen risks. that's just the perception. >> it is. >> the private equity guys are in the right place at the right time to take all this money, bleed it out, but they're not good at what they do. i've argued that some ceos. you look at what some ceos versus what other ceos have done for shareholder value or employees or whatever, you can be good at this. if a-rod can be good at swinging a baseball or actress can be good at being in a movie, a ceo can be good at something. >> i agree. i believe what private equity has been horrible is their own pr managing. >> we're having trouble telling the story right now. go ahead. >> no. it's a related question. so manufacture the big private

equity funds these days, kkr, carlisle, blackstone have oddly diversified away from private equity. how has that changed your calculus in terms of the investment thesis? people always think that if you go to the little guy, the little guy comes up with the billing returns. >> right. >> now that they've become large asset managers, more about effectively selecting the management fee than necessarily the promote how that changes things for you. >> what people want to see is managers who are beginning to get rich if they're successful and good at what they do through carried interest. they don't want to see them get paid on a fixed income stream where if they're unsuccessful or mediocre they continue to get rewarded. >> isn't that where the biggest names have moved in this industry? >> i think they have. they've become more of an asset gatherer than an asset manager. >> you're not pulling funds away from them? >> i think you absolutely have

seen funds come down from them. it's harder for the mega funds to raise capital. part of that is this backlash, high fixed rates, wanting to see more success across the board. >> can be mediocre for years and sort of stay, the money slowly leaves. can you really be crappy at private equity and stay in business? >> that's one of the downside. >> they might not know. >> the zombie funds, we think of them as vampires, we see them continuing to be alive and sucking fees out of the funds, how do you kill them off. >> thank you for being on here. >> thanks, enjoyed it. coming up we're rocking out this morning. the krafts are getting ready for their gig at the top of the hour, and we'll talk to the ceo of international paper, plus rock icon and jersey boy jon bon

jovi, all of the ladies are showing up early, he's on set and he'll join us on set. >> we need security today. >> we need some. >> mack, are you ready to go? >> mack is tough. >> doesn't look that stuff, spike people with your hair. >> the hits keep on coming. ca refu l, pringles are bursting with more flavor. [ crunches ] mmm. ♪

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what did what did you learn? >> never, ever get complacent in risk, challenge everything. >> what was your first reaction when you were told this was a much greater problem than we first thought? >> a little breathless but i'm telling everyone it's going to be really tough. we need people to put on their jerseys, figure it out and we'll get through this. we've got to run a business. every day people are buying, selling, making loans and trading, and europe, we're spending much more time on this

than europe. ♪ ♪ i get up in the evening we've got like 30 seconds, and we usually talk about chairs and the story, pick up the "wall street journal" and you will find if you're 200 pounds you've got 10,000 different species of bacteria either on or in you. and if you weigh 200 pounds if you were to collect all the bacteria, it would weigh six pounds so out of your 200 -- >> that's so gross. i don't want to read that. >> our producer weigh 230 so he has 8 1/2 pounds of stinking disgusting bacteria. this is from 80 research institutions. this has been found out what the

bacteria -- >> i thought if you shower at some point -- >> these are good. >> are you going to watch the documentary? did you see that? >> yes, we'll talk about that. >> when we come back, team kraft about to play in our house, bob, onand this and joshua here to talk about football, the economy and philanthropy, the second hour of "squawk" kicks off right after this.

keeping the business in the family. ♪ it's my life >> bob craft and sons josh and jonathan are here to talk business opportunities in america, as our week-long special honoring father's day continues. ♪ we weren't born to follow

putting a pen on paper. ♪ lay my card down on the table ♪ >> international paper ceo on the state of jobs and the economy. ♪ lay my hands on you ♪ lay your hands on me, lay your hands on me ♪ >> plus still rockin' it after all these years. ♪ lord i never drew first but i drew first blood ♪ ♪ call me undone special guest rock legend jon bon jovi here on set in the garden state. ♪ who sat you can't go home >> and listen up the due month, new jersey, brownie troop 4186 wants to you know -- >> the second hour of "squawk box" begins right now. ♪ oh, we're halfway there, oh, living on a prayer ♪ ♪ take my hand and we'll make

it, i swear ♪ good morning and welcome to "squawk box" here on cnbc. i'm andrew ross sorkin with becky quick and joe kernen. the dow would open up about 32 points higher right now. with testimony from jamie dimon out of the way, investors in global markets will turn their attention to the greek elections and eurozone. the "wall street journal" rompg that major foreign lenders are making plans to withdraw from the country if greece decides to leave the eurozone. germany's chancellor angela merkel says the debt crisis will be the focus of the g-20 summit in mexico this weekend, cabo, not a bad place for it, she'll be pushing germany's call for fiscal reforms as well as urging

the u.s. and japan to tackle their own debt issues. treasury secretary tim geithner calling on the eurozone to act quickly and urging more clarity with strength and rescue fund. many analysts are now saying to expect the currency to trade between 1.24 and 1.27 ahead of the greek vote. and spanish government bond yields rising above a very dangerous 7% level for the first time since the euro's inception, they have since come down. cnbc's michelle caruso-cabrera is in athens with more on the situation. michelle? >> reporter: hi there, andrew. so we have the greek elections on sunday. here are the three key things you need to know about the greek elections an outcome is more likely this time around.

we had one election a month ago but not a single party got enough of the votes to command the government. there were a lot of splintered parties so we didn't have an outcome. an outcome is far more likely, the decisive one because since that last election there's been a surge toward the two leading parties, they command a lot bigger lead now. it is illegal right now to publish polls in greece, but we do know that polls are being conducted, many of them and multiple sources have told us key point number two, the two leading parties are neck and neck. we don't know which one is going to win. for simplicity purposes one is anti-bailout, one is pro bailout. but keep in mind -- >> we just lost michelle's hit. she's talking about the outcome of the greek election. we have seen the bond markets under some stress this morning especially in spain where their

credit rating was cut by three notches. we'll get back with michelle, who will be covering this from athens. the spanish ten-year dipped back to 6.96%. the odd thing is the equity markets have not followed suit. >> the latest is the other pup peen banks it w all of the assets in greece are making contingency plans for an exit. the others, are they going to leave stuff there? unbelievable, writing it off at this point. >> you want to write it off, it gets ahead of the problem and a bit. >> it's a little messy and people are going to be writing on paper, i owe you things. >> about a year ago last summer we thought it was going to work. >> i don't think anything changed. people realize they have to reckon now. >> in countries that are contracting, the difference between 6.5 and 7, they can't

pay either. you get further and further away from 6.5 -- >> that's seven. >> seven is hideous but they couldn't do 6.5. it's not sustainable. i guess they're hoping it's a chance it could go back down. >> it's headed in the wrong direction. italy hit the levels and came back down. we'll check in with michelle later when we get that thank feed back. >> a triple dose of data in less than 90 minutes, weekly jobless claims, the may consumer price index and first quarter current account deficits. u.s. foreclosure activity was up 9% in may, according to realty track but the level of activity is down 4% from a year earlier and foreclosures have dropped for 20 consecutive months. costco is buying the rest of

its mexico unit,. a team that dominates in all their fields of business, bob kraft, jonathan kraft and joshua kraft. of the new england patriots charitable foundation. you also make eggs, you don't make them. >> we make them. >> i don't want to see you physically, but your chickens make them. >> these are for politically active people like yourself. our chickens in the front guy. >> i'm aned akins guy, too. >> beautiful, can i have two? >> you each have a dozen eggs here. >> wow. >> i had no idea you have a farm. >> yeah, they sumner cape cod and winter in chestnut hill. >> these are traveling chickens.

>> joe has got me on to the hard boiled egg every morning. >> bun, and it works, get your bacteria, you know, working early in the morning. who is son number one, the oldest? >> chronologically? >> they're both right here. son number one, son number two, jonathan and joshua. >> i'm number three. >> what we were just talking about, you're in this country, you start this firm, you become a self-made billionaire, you become so successful, son number three has to run your philanthropic organization. this is what kills me about success and the idea that people don't give back and what i'm getting to, josh, was one of your comments about bruce springsteen coming on. we have jon bon jovi, they're

saying this is bull shihtzu. i make it a dog. >> woof, woof. >> from sea to shining sea and talking about america, the promise was at the stadium yesterday, our family honored 16 exemplary volunteers from throughout new england, a guy made over 15,000 care packages for troops, an 86-year-old woman who volunteered at the day in a farber cancer center for 36 years, four days a week and these are things that are happening, great things across america and people have to take the time to find them. >> you're not unique in this, meant for people that become wealthy? >> you make a good point about what's going on in america today and what we need to do. when i started in business europe had the families that had

an opportunity to grow and prointer. this is the greatest country in the world and our family had the privilege of being able to do well financially and our mission statement is about building bridges, philanthropically or business wise. people want to do business with families, and that's what america is. you know, we need to get that family feeling back in washington, that red and blue and not enough -- >> in washington it's the manson family unfortunately. we may have a bunch of good families else where but i see squeaky and you know -- >> we got to think long and you know, we're privileged, even with our players, a lot of our guys come in and we try to teach them that it will be rewarding to them to be able to give back. many of them come from humble financial backgrounds, and they feel good when they do good and yes, josh was just referring, we had over 300 applications for

something we named in memory of my sweetheart, she was the number one volunteer giving back. she gave full time and there are so many people who are doing what we call social entrepreneurialship in the charitable area, reaching out and touching people just like we run our businesses, and we got to continue to foster that, and jon bon jovi, he's a unique guy in that he's a family guy and he hasn't forgotten his roots. >> what time is he going to get here? what time is he going to get here. >> everybody said about five of 8:00. >> your cheeks are getting red. >> you're excited. >> that was a joke, but -- actually, yeah, i protest too much, right, about not be excited. >> but we have to, you know that sense of team and effort, john farachi who runs international paper he's built a global company building that sense of team, getting his key people together to do what they got to do to win and that's what we try

to do in our group of businesses and our own philanthropy, and there are a lot of families doing that and the story isn't being told, people doing things not looking for aclacoladeaccol doing the right thing. look what's going on in europe now. i'm concerned about the potential of social unrest coming back here. what they did in spain and greece, instead of interest rates going down after this bailout, they go up because all the debt now is, this funding goes ahead of the debt they have so it's subordinated. >> to me, bob, what would cure and help here it's all about growth. where does growth come, from the private sector, from people like you, businesses giving consumers what they want, earning a profit, hiring more people, all

comes from -- >> making the pie bigger. you can do all of the social programs if you have growth. >> howard schultz from starbucks was on. howard you got your stock back to de52 when you were having barista problems. it was a $9 after he built that. it's easier to flourish and to do all these philanthropic things when your company is profitable and businesses come on board. you can finish my sentences, right, jonathan? >> as i told you the last time you're my older brother and so i agree with you, and we got to get back to understanding that what really drives this country and gives us the great economy, we need a strong economy and strong national defense and without those two things you got nothing and hopefully we're going to change. >> you will see. are you backing romney?

your dad might get mad, not that he's not a romney guy but you're bipartisan. >> you have customers that are democrats and republicans. i understand that. that's fine. >> we're about winning, okay and i'm with you -- >> back to the participate roits again. >> we need growth in this country, you can't do it redistributing the pie. make the pie greater and we want to incent people to do that. jonathan is an articulate spokesman on that. >> who is also when you've been on you make boxes, you always know when the economy is slowing. both of you guys tell us before we actually see it because i think everyone's shifting in a box and you have the box companies. >> we were on a few months ago before a jobs report. >> you said it. >> we had seen it coming unfortunately that the slowdown was coming and unfortunately, things haven't changed much since a couple months ago. it looks like things are

meandering along, year over year, same-store sales for us and looking at existing customers and everyone is down one to up maybe a half point so it's stagnant, very flat. >> so nothing's improved or -- >> i think we're growing share because where we have our plans we're able to grow our share. we have a clean balance sheet, we're investing in lots of capital equipment. we have new technologies so we're growing share but that's the way we're growing and we're growing share and doing it with capital equipment, we're not doing it -- we were not confident enough to hire people right now and we can do it, get productivity out of what we have, and the more we talk to other people that's what they're doing, too. that's why i'll defer to my father. >> that's the problem right now, the uncertainty in america with planning. you look at the business investment. this first quarter as opposed to the previous three quarters people are not even investing in physical equipment the way they

were because they're unsure of what's going to happen, and that's about coming together and building the bridges and taking away this uncertainty. jonathan said it very well, we'd rather invest in equipment than people right now because we don't know what he's going to happen and the obligations you take on when you hire people full time and our friends who run global companies, they're very concerned about the future of what's going on financially in america. >> we're going to continue this conversation with the krafts in a moment. >> up next, the proof is in the paper, we'll talk economy and business paper solutions with john farachi after the break ad later jon bon jovi will be here on set with us as well. "squawk "rocks. only on cnbc. mbig splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac!

[ male announcer ] ...forbusiness.com. ♪ ha ha!

welcome welcome back, everybody. the future s been higher throughout much of the morning. s&p futures by over 2 points happening while we continue to watch spanish bond yields on the ten-year touching 7%, just below that at 6.956%, a huge concern but at this point the equity markets seem to be hanging in

there. one of the questions we've been talking about around the table today and many days is whether regulation and uncertainty is holding back hiring and business investment. our next guest says the answer is no, it's more about demand. what's he seeing now? time for our c"ceo call." you just got back from china and russia. we were talking about what the demand picture is like there. >> we have a business in europe ri tilted to the east and we haven't seen businesses fall off yet which worries me. you have distressed countries lending to distressed banks and eventually this is going to hit the business side of the equation. >> joe had a nice joke, you're not providing the paper for the money for the euros to be printed. >> i wish we were. >> it's a high margin. >> how do you explain that?

>> international paper is positioned in eastern europe and russia which is fariing better than western europe. things in spain in the real estate market crashed. >> we've seen tech companies have problems, is the paper business different in many ways? >> no it's not. eventually the business is going to catch up with the headlines which worries me so i think we'll see more bad, worrisome things to come unless we get a solution. >> we set up the issue of uncertainty piece and whether it's the uncertainty or the demand, the chicken and the egg problem. >> you just passed out the eggs. i think it's all about demand. consumers are sitting on the side lines because they're worried about jobs and the future and this economy in the u.s. is 70% consumer driven. exports will help but we can't export our way out of a recession or slow economy just

like we can't spend our way out of it with government spending. >> is the demand being driven or the demand problem being driven by uncertainty in washington or is it the other way around? >> i think one of the things weighing on consumers is housing. stock portfolios came back from where they fell and the housing market hasn't come back. there was an article in the paper yesterday, home equity is down 30% so consumers aren't feeling like they can spend money. once housing stabilizes and i think it's starting to, consumers will start to spend more discretionary income. it's a long, slow process. it feels like the bathtub is filling up a drip at a time. >> jobs question, you just started up a new mill, actually an old mill started up in franklin, virginia, a mill that you have 200 new jobs at this mill? >> we do. >> that's down from how many? over 1,000 back you closed that plant when?

>> 2008 or '09, right at the crunch of the recession. >> walk through the crunch process in terms of making that investment and doing that in today's environment when you say the demand may not be there. >> it's a different product line. the mill we were running was paper and we ran out of orders. i got a call from virginia who said what can we do to help? there's no orders. we don't need incentives or credits for hiring people. we need orders. when we shut down the facility, it was a tough decision. we looked very hard, is there anything else we can do, and ran a business called fluff pulp, baby diapers and that's an export oriented market so we figured out a way to restart the facility or part of it adding 200 jobs, about 100% of the product will be exported so it's a great jobs story because the u.s. can be competitive in exports markets.

>> how do you make the decision to build the factories and try to export the products from the u.s. versus do it there locally. >> well it's not one or the other. do both. we're spending $1.5 billion of capital, three times the amount spending in 2009, spending $800 million in russia to build a facility to supply china with product they need called market pulp because they're a net importer of fibers. when the demand is there we'll make the investments, for sure you'd like more certainty and less regulation but despite all that, if demand is there, we'll invest. >> this is a man you want to travel with. could you help ask him to get me my ring back? >> bob, for a while, putin was, he's never out of the picture but a story we should know and the president should probably know, right? you were there. you can confirm putin stole his super bowl ring. >> i'm not sure he stole it. >> he still has it and you

don't. >> he has your ring? >> how did that happen? it's been on loan for seven years. >> didn't get it back. >> what? >> that's a story, we got to run to a break but after the break we'll tease that up. >> we'll get rid of our missiles if you get rid of yours. okay, sure. how's that super bowl ring? >> i am going to see putin thursday or friday. >> you can get it back! oh okay, still to come, from center stage -- john, thank you. jon bon jovi, we'll speak to the rocker and businessman in just a bit. ture gets the most rewards of any small business credit card. your boa! [ garth ] thor's small business earns double miles on every purchase, every day! ahh, the new fabrics, put it on my spark card. [ garth ] why settle for less? the spiked heels are working. wait! [ garth ] great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one.

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coming coming up next your tools of the trade, and then this is big, "squawk" is giving love a bad name, jon bon jovi joins us on set for a live interview. ♪ ♪ here we are, me and you ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial

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back toome welcome back to "squawk box," everybody. in our headlines this morning, european debt yields getting some attention in the markets. the yield on spain's ten-year bond breaching the 7% level for the first time ever after a moody's downgrade. it's come back down slightly since then. the yield on the three-year debt rising to 3.5% at an auction this morning, up from 3.9% a

month ago. federal probe into older model chrysler jeep vehicles is expanded. regulators are looking into the risk of fire after a rear impact crash. the investigation includes 5.1 million vehicles and moving closer to a possible recall. a jury takes up the insider trading case against rajat gupta, accused of passing trade information to a hedge fund manager. take a look over here, look over that way, jon bon jovi is here and will join us in a moment. >> in the flesh and that is some flesh that, is some flesh, wow. wow. >> nice. >> he lights up a room. >> there's no lights over there and he's lit up the room. >> doesn't matter. >> oh, there he is. my pal. hey, i like you in the shades though. >> traders focusing -- >> what are we doing? >> there's other people around here. >> all of a sudden like everybody shows up.

>> not like that for us, is it, andrew? >> no. >> we'll get to the trading block, traders are focusing on europe as we get ready for the records this weekend, kevin book is joining us and nick, head of currency strategy at wells fargo. kevin, when we hear these opec guys who we now know are all very short people, kelly, i message kelly, don't step on anyone, we should run that tape to show it, right, they look like little putia. he said $100 is good for us. that's not surprising. as long as we can take it they'd want 100. it's not until we cut back that they feel they'd want prices to come down. >> no, generally speaking they've been spending more and more on special obligations, particularly in the wake of the arab spring but in general the cost of oil production goes up even over there, where it is

much lower, therefore more oil money they make means more oil investment they can make for more oil money. they want a higher price. saudi arabia's been the dove that's been the intercessor coming to the rescue of the west saying we have to play the long game, we don't want prices so high that demand collapses. >> so it has collapsed to some extent or the price has. is this the bottom at 80 do you think? >> i don't want traders shall we say "living on a prayer" but there's three catalysts -- >> pun intended. >> oh, yeah, i know. look the oil is slippery when wet. >> oh! >> and tends to slide past your price points on a technical basis. when you look ahead there's the iran meets the p5 plus 1 in moscow. the iran talks may not go so well. in addition to today's opec meeting there's two sanctions cliffs later in the month, the 28th in the u.s. and also july 1st, europe blocks westbound

imports from iran and also the tanker reinsurance for deliveries to asia that could tighten spare capacity. there's three things that look modestly to medium and bullish. anything less than explicitly dovish from opec means we could have an extraordinary meeting, and that would be tightness and therefore bullish. >> nick, i don't know whether you have an ipad and been able to google jon bon jovi quickly to get an anthology of his songs. can you use any of his songs in europe? >> maybe guns 'n roses. >> a hair metal type thing, that that will work. what are you expecting on this weekend. >> it's an unpredictable situation. you don't want to be short or long as far as the euro is concerned. it could go either way, a lot of sentiment, you could add how

short the market is. we expect to see the euro move a little higher in the next few days. >> are stocks cheap? >> i think so but justifiably. arguably with stocks, there's more of a natural tendency to be long and perhaps you want to remain underweight going into that weekend election but with the currencies it's more of a two-way game and i think you want to be more neutral. >> they told me i could keep talking to you guys or have more time with bon jovi so we'll see you later kevin, nick, thank you. appreciate it on the trading block. >> thanks, guys. >> coming up, the second richest band behind u2 earned $125 million in 2011 and front man jon bon jovi knows a thing or two about business success and joins us after the break. "squawk" rocks in two minutes. ♪

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live my life ♪ "squawk box" is rockin' out this morning with the music icon, is he not just topping the billboard charts, he is also a philanthropic power house and businessman to boot. jon bon jovi, chairman of the bon jovi soul foundation and great to have you here this morning. >> good to be here. >> i know you are good friends with the krafts. >> yes i am. >> we've gotten to talk with you before. bob kraft talks about how you are one of the smartest business people he knows. >> he's far too kind but thank you for the compliment. he's my mentor and dear friend as are the kraft family. they've been great to me. >> you are not the typical rock star or rock legend. you are a serious person who is involved in a lot of different aspects. why don't you talk to us about what you see in business when it comes to the music industry and what's happening to the american consumer. you must have an idea from watching tours and watching what

happens. >> as bob dylan once said time these are a-changin'. we're at a crossroads in the music industry and i think initially the record companies took advantage of the consumer, the consumer then wised up to it and instead of embracing some practices that were happening, they went after certain people and in turn lost it, and the genie is out of the bottle as they say, but it doesn't mean that music can't be saved and the consumer can't find a consumer-friendly model that they will pay for. ultimately, and at the bottom line of all this is the arts are all interdependent on each other so those copyrights need to be protected, music, movies, books and art are interdependent on each other and for the culture, to go forward it's very important that we find a way to be able to grow that business. >> the internet has disrupted protecting those copyrights.

do you think though that apple and the ipod, has that been a good thing or bad thing for the music industry? >> i've gotten in a lot of trouble for commenting on this. i'm a big fan of apple and great admirer of mr. jobs and now his legacy. but in honesty, as i -- if i was able to describe and said and only a quote was taken from a longer story, if i present you a book, a movie or you know, a record, i want to you hear the first track as much as i want to you hear track 11. i've worked the last year to get my new album ready. track 11 is as important to me as the single you'll hear on the radio so to me it was important to present it as a work of art. and not to sell you one song at a time. so that was something i argued, and seemingly lost the argument, but i still stand by that statement. >> because you put this all together as something you want seen as a whole, too. it's not just a track -- >> absolutely.

if i took out a chapter in the book you'd feel it was incomplete that, simple. >> can i just say one thing. >> of course. >> as we're talking about america, joe, and what everyone has. here's a guy that does all the right things, he's a family guy, he's in entertainment, where all the crazy stuff goes on. he's always at his kids' events, sporting events, he's married to the same woman, he's a great businessman. he gives back into the community. he does things that are amazing. even in philadelphia with the homes or the restaurant, the soul food, it's just -- it's what we need business families in america to do, to connect with their communities. he does it globally as an entertainer, someone we're proud to have as a special friend. >> thank you. >> and we need him to be a role model, i hope more young people in entertainment follow his lead. >> that's kind, thank you. >> why don't you tell us about soul food. >> it's a soul kitchen, in red bank, new jersey. we have what's called a for

purpose restaurant, an extension of our foundation and we opened this restaurant after what was the housing bubble and we have built houses, built 330 houses thus far but in these times, with food insecurities, we opened a restaurant, and the idea is if any of us came, there are no prices on the menu, but a minimum donation is asked of you. if you choose to just come in and pay. you're served a great three-course meal. if you cannot afford, you're given a gift certificate if you volunteer so we ask you to work in the kitchen or on the grounds, or if you're not able to work in our restaurant, we partner with the food bank and the medical clinic and other not-for-profits that people can get a gift certificate and come to our restaurant and the foundation covers that over. >> why don't we talk more about charity and where things stand right now. joshua, we got a chance to talk off camera before. what's happening to charities

right now since the downturn in 2008? has it been more difficult to bring funds back in? >> i think where i am at boys and girls clubs of boston we're fortunate, we have a lot of people that really support us, thick or thin, a lot jonathan mentioned people from bain have been great to us, but i know a lot of my peers in the business have gone through some tough times, cutbacks and so on that have impacted their ability to serve the community. >> now the national discussion in washington at least has turned to ways to try to cut our national debt and our deficit and one of the suggestions that has come up has been to streamline the tax code and with that, there would be a lot of potential changes. what would happen to charity if the charitable donations, the discount that you get on your taxes for that, if that was stripped out, what would happen? >> i'm not the brightest guy in the world, becky, but i would say why would we ever discourage people that invest and create

jobs, create capital, and make our economy move, why would we discourage them from investing in community and supporting community? pretty simple. >> do you think it would take a huge hit? >> oh, yeah, i think, and i just people whether it's my dad, my brothers, jon, why would weigh want to discourage them from taking away a deduction from investing in making a community better, using their business know-how. they've created jobs and opportunity and they understand how to invest, so i'd hate to discourage that. >> that's an astute point. i don't think jon or myself or our families, we don't do it for the deductions. we do it for the psychic income, but i think a lot of people get started with charitable giving, part of this, they do get a tax benefit, but the economic return from that is so great especially in these times, what we call the social entrepreneurship, the kind of thing of the soul --

>> kitchen. >> -- soul kitchen it's like a random act of kindness. people feel good and then they go out and do things, but it's the catalyst to get things started. i really hope no matter what changes they make in the tax code that they don't eliminate the charitable deduction. >> would you like to see changes in the tax code overall? >> yes. personally i think we need a value-added tax. because i think that will cut down on consumption and you know, incent investment and exports and it's everywhere in the free world, i think, except for america. >> making buying albums and going to concerts more expens e expensive. >> they'll still go for it. he's not a commodity, he's a unique special asset just like i like to think our football team is. >> what will you do with the income tax? >> i don't really care. >> you can't have a value-added and an income tax. they tried that in europe. >> well i'm not -- whatever

allows them to sell the value-added tax, they should do because i think that would do more to help america, and create -- i'm about creating jobs. that's what we really need to happen. he does great entertainment, making records, creating activity. we need, what you said right at the beginning of the show, we need growth. >> jon, i -- i'm not sure how to ask this, but you see these private sector guys and you hear about job creation, and i know you supported democrats typically, the gore or kerry. do you see some of the way the rhetoric goes back and forth and how uncomfortable it can be when you sort of trash the private sector or business people? >> sure. >> how do you put all that together? >> one thing i don't use is my platform on the stage to discuss my politics. if i'm involved supporting a candidate at a rally you know what you came to see. i'm just there to get people to come to listen to the candidate. i'd never stand on my stage and

preach my politics but i'm just all about helping community and so if i find through my own celebrity that i can do something like our foundation, building houses, and giving people, empowering people, i think that's important, and it's become a responsibility. >> artists in general are, seem more concerned with the philanthropic side of things, it comes from guys who were successful in the private sector. >> surely but it's not just people that are donating money. i tell you, i'd rather have people donate their time. >> you also want to grow the overall pie out of the economy and make it -- >> and bring community together, the rich and the poor and the educated and the uneducated. we can't rely on government, period. i've walked straight into the brick wall of bureaucracy being appointed to the presidential council and realizing that frustration. so if we, the collective we rely

on each other in community, i think that's all we've got going forward to rely on is each other. >> i think the greatest thing about what jon does, a lot of artists give their time and their celebrity, like he said, and they think that's giving back and that is, it's part of it, but jon's been fortunate and so jon gives his money, too, and i think when you combine the money with the time and the articulate way that he speaks, he really is a leader, not just for people who are his fan base, but for anybody who has been fortunate enough in this country, too many people in his position say i'll show up at your event, send me a limo, send me a jet. >> right. >> but it's true and he doesn't talk about it, so that's why we're going to talk about it and on top of it, when he says he doesn't preach politics, a good friend of mine went to see roger waters the other night, he loves the wall. he said i had to leave in the middle, the guy kept talking politics, i was there to be entertained.

>> i was going to ask a quick question on soul kitchen. is this something you could expand around the country? >> i think so but we've been pragmatic in our approach and simply writing the book every day. when it's absolutely right in our retail space that we're in now, then perhaps we'll share it with others. >> how long has it been out there? >> we've been two years but we started in a church basement for a while and then we were in a soup kitchen for a while and there were stigmas attached to both of those places, to be perfectly blunt, until we were in a retail space and the fear of the unknown still and what we're realizing is through outreach and bringing people together slowly but surely we're chipping away the at the stone. we're serving the community so i think we're doing the right thing. >> if i could come to music -- >> are there 11 new songs? >> there are. >> the 11th? >> it's a killer. >> we had sean parker on last week, behind napster and now has a new product and spotify. is there a model you say this is

the future of the music business that is economical, that is going to work? is there something on the horizon? >> i'm not sure about any model that i would endorse. i like the idea of subscription, but i'm a purist. i know what it meant for me to put on headphones as a boy and hold that album sleeve. i was really dead set against the artwork getting to be this big on my cd and now gone. album and lyrics and the imagination really played a big part. >> what will you listen to as you're leaving here, just all about jon bon jovi? >> no. >> are there bands you listen to? >> i listen to new and old. >> who do you like that's new? >> i don't know, there are new bands that i do like a lot and there's unsigned bands and ways for kids to go about getting record deals today and breaking the model that i came up in 30 years ago. there are ways through youtube and through independent releases and there are ways for the next

bob dylan to be found. >> are you treading on country at all in the new album? >> a couple songs could cross over into that. we had an album influenced by nashville, it was a number one album, and number one single, first rock band to have a number one country single so we've been fortunate. our music at this point is universal, timeless, classic out of generations of kids with still number one records. >> when is the next album? >> january single, march album. >> maybe you could play it on the set. >> thank you. >> it's been a pleasure. >> i can go back to bed now. >> thank you very much. my dear friend. >> when we come back we're going to talk about the european debt crisis casting a shadow over world financial markets. "squawk" will be right back. optionsxpress, where you can trade your favorite products,

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♪ ♪ i know, i didn't ask them to do that. i'm hearing something else going on. anyway we'll look at some stocks to watch this morning, let's bring up, the first one as i login in my personal file, nokia, you heard cutting 10,000

jobs, warning of a wider than expected loss, and you would figure most of the jobs hard to say fortunately are not here because there are people losing jobs somewhere and you don't want that but most are probably not in this country. and smithfield foods earned 49 cents a share, short of estimates of 53 cents at smithfield, hurt by lower than expected margins in the fresh pork business. we have some eggs here. they're nice. they're different colors. i haven't had one yet. >> all organic. healthy. >> they haven't been hard boiled yet. >> they're in different colors. z>> supervalu, barclays wrote a positive report. eurozone, danger zone, choppy markets and making money, we'll talk about with a couple

of important people and 8:40 eastern time, viacom president and ceo philippe dauman will join us. >> if you're just tuning in you're two hours too late. >> our view is that the markets have discounted a lot of this. you're selling at 12 times earnings, companies are flushed with cash, they're global in nature. >> people want to do business with families, and that's what america is, you know, we need to get that family kind of feeling back in washington. >> we're also in western europe and we haven't seen businesses fall off yet which worries me. you have distressed countries lending to distressed banks. eventually this will hit the business side of the equation. the headlines worry me so i think we'll see more bad things, worrisome things to come. >> the third hour of "squawk box" starts right after the break. [ male announcer ] introducing a powerful weapon

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europe in europe in crisis, the countdown to sunday's greek election is on and the yield on the spanish ten-year hitting that key 7% threshold for the first time ever. we'll break down the risk with two global market strategists. a supreme court decision against president obama's health

care law would put some health care providers in an uncomfortable position. ♪ moon river >> especially those flourishing under romney care in massachusetts. we'll talk to the president of brigham and women's hospital. he's the head of a media empire, viacom veo philippe dauman will join us on the set. >> "squawk box" begins right now. ♪ [ no audio ] my mike's here. it's here. sorry, hi, i'm becky. it's joe kernen, andrew ross sorkin. counting down to father's day, with patriots owner and kraft group ceo bob kraft along with his sons jonathan and joshua.

jonathan is president of the new england patriots and president and coo of the craft group and joshua ceo of the boys and girls group of boston and president of the patriots organization. we've been keeping on eye on the equity markets. the dow futures are up by 8.5 points, s&p futures up fractionally and we'll continue to watch as we get closer, 8:30 is when we'll get a big number. >> three of them, a triple dose of data coming in less than 30 minutes. we have weekly jobless claims, the may consumer price index and first quarter current account deficit all coming at 8:30 a.m. eastern. >> and on our global headline this is morning, moody's investor services cutting its rating on spain, it lowered the country's bond rating three notches to eaa3 from a-3, just above junk territory. the yield on spain's ten-year hitting 7% for the first time ever this morning. right now there you can see it,

wow. we're coming up there. take a look quick at european equities for a moment, we've got some red arrows across the board. look at that, greece has a nice little green arrow. i don't know what to make of that. the "wall street journal" reporting this morning that major foreign lenders are making plans to withdraw from the country, if greece decides to leave the eurozone, on the front page of the "wall street journal" this morning, greek bank withdrawals are also on the rise approaching the same levels that they were when the coalition talks collapsed back in may. it's a danger point and cnbc's chief international correspondent michelle caruso-cabrera joins us from athens with more. michelle? >> hey there, andrew. let's get you up to speed on what's going on with the key greek election this is sunday. three things you need to know. we think this time around we might get a decisive outcome, that is more likely. there was an election a month ago but so many splinter parties

splintered the vote literally. they couldn't form a government. we have seen two leading parties have now really seen a surge in backers so we might have an outcome next week. the two leading parties are neck and neck. we've seen some behind the scenes numbers, it's illegal to publish poll numbers right now in greece but plenty of polling is being conducted and right now the numbers indicate neck and neck. we'll put an asterisk next to that and the third thing, we're going to know roughly 3:00 or 4:00 in the afternoon on sunday, new york time, around 1:00 noon we'll start to hear some exit poll data so we'll get an indication of where things are going. before sunset we think we'll know on sunday what's happened with the greek elections. we show you the greek banks, here is the asterisk i talked about, soaring across the board in the last hour because these secret polls are indicating perhaps a shift towards what we're going to call the pro bailout party. an oversimplification for cable

tv but we'll talk about that in a second. at the same time there's a second explanation happening here which is that the anti-bailout party has started to soften the rhetoric a little bit so that regardless of what happens maybe greece works toward staying in the eurozone, so big surge in the athens stock market, big surge in the banks. let's introduce you to the candidates so you can know what's going to happen. antonio samaras, 62, u.s. educated economist, went to the harvard business school, understand this. year ago the other european leaders hated this guy, because he was anti-bailout. he said look you're asking us to raise taxes and cut spending, you're going to bring on a recession, it will be harder for us to pay you back. let's do the labor reforms first, let's liberalize the economy, et cetera, and then we can do the difficult fiscal targets later. now one year later the european union thinks samaras looks good because they're terrified of

young upstart 37-year-old alexis seiprus who is a socialist, communist full on and told the greek people we have enough leverage to renegotiate the bailout. we don't have to stick with the terms because they're terrified of what will happen afterwards. as we run up to the polls, people are taking more and more money out of the banks. we haven't seen full scale runs but people are withdrawing more and more money for fear of what might happen over the weekend. back to you. >> thanks, michelle. appreciate it very much. for the u.s. market impact on the developments in europe let's turn to cnbc contributors dan greenhouse and rebecca patterson, dan chief global strategist at bti and rebecca morgan, former chief market strategist, starts soon as bessamer trust at chief investment officer. dan i go to the front page of "the financial times" and one of the stories they're talking about is whether france is trying to push for the esm to

come in, and stabilize and oversee all of the banks. is that something you think can happen, and if so, how do you position yourself in terms of the markets going into this weekend? >> well the first question with whether it can happen, the simple answer is anything can happen. the better question is will it, and the likelihood of that happening in a timely fashion is based on the people that i'm speaking to in europe and my read on the situation is no it's not likely to happen. from the u.s. investment standpoint you're left in sort of the bubble of uncertainty, if you will, that's plagued markets for not just the last couple of weeks but last couple of quarters and the unfortunate reality that's likely to persist for the next couple of quarters, if not the next couple of years. >> if my mother was your client and called you this morning and said what do i do you tell her what? >> my mother is my client and when she talks to me i'm adamant about staying about for simplistic purposes we'll call defensively positioned

portfolio, dividend paying stocks, fixed income products, not necessarily treasuries but investment grade, even etfs. i say btig's clients are all institutional in nature and what i have to say to them is different than what i say to my mother. >> rebecca, as we walk into this weekend, what is the chance there's an upside surprise, meaning the downside doesn't happen. is it already baked into the cake? >> you're seeing some rally in greek financial stocks and i think that does suggest people squaring positions a little bit into this weekend, in case you get a more pro austerity government forming. it doesn't even matter who it is. if they get negotiations and greece doesn't leave over the next several weeks we could have a bigger relief rally. so i think the uncertainty is going to last with or without greece, it's just a matter of the short term tactical volatility we've got. in terms of what i would tell my mom, similar to dan, i'm

focusing on yield. we're going to have downside for cyclical markets, equity markets, limited by central banks who are easing. we have the fed next week, downside limited by the fact that no one owns stock. you see the mutual fund flows going into bonds, downside limited by the fact that european politicians don't want this to completely fail and finally a lot of bad news is baked in. we see that in spanish ten-year yields. the downside is limited. the upside is limited by all the uncertainty so we're in a choppy market, in that market i want to be in yield, in high dividend equities, high yield, corporate debt. i like corporate balance sheets, not sovereign and i want to be in dollar denominated emerging market debt. >> if i could jump in quick and say i agree with rebecca more generally but i would be remiss if i did not note some of the best performing names in the s&p 500 are non-dividend paying, more cyclical or volatile names. people would be shocked to know trip adviser and expedia are two

of the best performing internet retail names that have good fundamental stories, don't necessarily fine an investor base as it relates to dividends but doing extraordinarily well. >> dan, what do you do about big multinational dividend paying company that has big exposure to ru europe right now? >> certainly you want to take that into consideration but more generally what we're talking to btig's clients about, give or take the s&p is not as some people say 50% revenues generated overseas, clees eclos 30% and even then that does not mean that 30% of revenues are generated in foreign currencies. lot of transactions are still done in u.s. dollars. there isn't a one for one relationship, let's use caterpillar for instance if they get 50% of revenue from overseas, 50% are in yen and euro and a smaller percentage in foreign currencies. if i could say something quick before we run with respect to

something jonathan said in the last segment i've seen roger waters live and you know going in his politics and i can't believe anybody left half way through. >> dan, we got to leave it there. rebecca, thank you. we look forward to seeing you at bessamer when you get there. catch rebecca on cnbc's "money in motion" fridayless at 5:30 p.m. eastern time. >> dan puts song references in all of his notes he sends out, jonathan. >> i'm not sure everybody knows roger politics. >> the guy didn't want to pay to listen and get preached to. that was the point. >> coming up the president of a massachusetts hospital giving obama care a passing grade. will the supreme court stand by the president's health care law? dr. gary gottlieb of brigham & women's hospital joins us next. and philippe dauman, ceo of viacom, overseeing mtv, vh1, comedy central, spongebob bob, nickelode

nickelodeon, he'll join us on the set in the next half hour. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ a i'm with scottrade.

back toome welcome back to "squawk box." let's go to cnbc's kate kelly with breaking news. >> thanks so much, joe. the carlisle group, the private

equity firm is in advanced talks with sunoco will purchasing another philadelphia-based refinery. you remember the delta story, bought a philadelphia area refinery about a month or two in an unusual deal for an airline. it's a private equity firm seriously considering purchasing a refinery. this produces gas, diesel, a variety of refined products, 330,000 barrels a day and a refinery set to be idle if sunoco could not find a buyer. talks with carlisle exclusive for two months are moving along. the exclusively agreement is set to expire friday and the hope is to get a deal done before then if possible. apparently i don't have the exact terms but apparently carlisle will get this on the cheap. sunoco will retain a minority stake. the state of pennsylvania may provide assistance in this case as they did with delta. they're eager not to see 900 people laid off and hoping this

can be turned around. it's been a tough couple of years for the refining business. these assets might have been $1 billion five years ago. delta bought this for $150 million, this could be within the zip code, perhaps cheap you are but it depends on the terms so we'll see what happens. i'll keep you posted as we move along. >> thank you very much, kate kelly. health care providers and businesses are waiting for the supreme court's decision on president obama's health care law, it's expected any given monday. our next guest is the president of partners health care, the largest hospital system in massachusetts, this includes mass general and the harvard teaching schools. we're joined by gary gottlieb. thank you for your time this morning. >> good morning. >> you have the hospital system that has already gotten a big taste of what might come from obama care. you're in massachusetts. you've had health care that was passed by romney for some time. can you tell us how that's impacted the hospital? >> sure, it's been a very positive experience for us,

because now over 98% of the population is covered, almost all the children in massachusetts are covered as well, and that's allowed a greater movement in the market to more unique products that have started to move us really toward a health care system away from an illness care system. so to start to try to manage costs and create a higher degree of accountability, but the first was really to create coverage, so it's reduced the number of uninsured people remarkably and it's allowed some private/public partnerships to start to evolve in new and unique products into the marketplace and it's gotten people access to more in the way of primary care, taking them away from the fragmented services they might only be able to get through emergency rooms on an acute care basis. >> that's been the knock on obama care is that it doesn't really bend the cost curve in any significant way t gets coverage but it doesn't knock down costs so you're saying that in your experience, the cost issue comes secondarily after you get everybody covered? >> getting people included

creates the opportunity to then try to figure out what approaches and incentives will start to bend the cost curve so what's included in the affordable care act are large experiments, one of which we're participating in already, pioneer accountable care organization product from medicare in which payment starts to move away from transactional fee for service medicine which has associated with it substantial fragmentation and incentives that relate to providing more care to trying to manage populations and sharing in the savings, if trend is reduced. we've moved into a number of commercial products as well in that regard, and this market has started to move aggressively creating a higher degree of price sensitivity between purchasers of care or consumers and providers of service, and there are some of those experiments that start to move out of the center for medicare and medicaid innovation, that are in the affordable care act that can change markets pretty remarkably in the ways that are starting to change here as well.

>> would you give good grades to obama care at all? >> it's a very, very large piece of legislation, and very little of it has been implemented thus far. the pieces that have been implemented thus far have had benefits including kids who are up to 26 years of age with their families' insurance beating out the doughnut hole in the medicare drug benefit for older adul adults, and allowing them to have reduced barriers to access to drugs. the real pieces of coverage reform don't really start to happen, so to be able to give it a full grade is unclear. there are elements here that are parallel that have started to work well but you know, it's a process, and it is a grand experiment. at the same time, it will move us away from a variety of ways in which it's been dysfunctional. we are going to have less resources and we are going to need to be able to do more and good with the resources. so the question is how we are incented to provide those services and whether we can be

accountable in terms of quality and costs and without people being covered we'll continue to have essentially commercial insurance across subsidizing publicly paid or uninsured people, fragmented care where we can create continuity and we'll be able to create incentives for the system. >> why do you think candidate romney is promising to repeal and replace obama care? >> you know, i think first probably the experience of the way that the bill was put together and passed at a time of tremendous difficulty in the overall economy and the sausage making made the bill seem so big, so difficult to be able to comprehend, that it's, its popular sit not particularly great on the international level in massachusetts, two-thirds of people endorse the health care reform we have here. >> doctor, could you foresee a more free market base that would

accomplish the good things that you just mentioned that would keep a lot of the good things, but leave more in terms of private market solutions, you know, get rid of the barriers to insurance companies going, you know, from state to state, tort reform. lot of things that might bend the cost curve and allow coverage have a certain amount of coverage guaranteed for everyone, maybe not a cadillac but something that where everybody would be insured. it's better than what we have and it doesn't mean there isn't something better that we could design with more private sector solutions, right? do you worry about innovation being sort of cut down when the government becomes basically the provider? >> well, one of the elements here and part of the challenge in both the affordable care act and what we have here is we tried to base it on a preexisting insurance model so we tried to use many of the elements that existed in the commercial insurance market and continue to promote them and then have exchanges being an approach to be able to access

those insurances for those people who can't gain them through their employers, so if we don't allow innovation and don't allow a substantial freedom in the free market, i agree, we won't have the kind of evolution that's necessary and some of the pieces we're starting to see here in the local market have started to create that innovation. some of it is not great for us, as an expensive provider, but it's considerably more price sensitive to consumers, in tiered networks have the ability to walk away from us where they were otherwise price insensitive and those who referred to us, also put more pressure on us in terms of prices and cause us to think through with them as well as with commercial insurers how we can come up with more creative ways to leverage reducing total medal expense as opposed to transactional prices. the free market has to play a critical role. >> jonathan kraft is with us today, also on the board of mass general. >> gary, just to follow up on that, the whole point about

innovation and the critical role that it plays in health care in this country, how can you continue to compete running hospitals where so much cutting-edge research in the infrastructure that goes into it, and will benefit all the other hospitals in the country, as you develop more and better ways to take care of people, how do you balance those two things long-term, being able to, being forced to get the costs down while trying to provide those services and compete with people who don't have the same cost infrastructures? >> jonathan, you know well this is the really big challenge. we've built infrastructures based on our success in fee-for-service medicine and to some extent a lot of what's happened has helped to subsidize science and at the same time, we've been remarkably successful in achieving growth for biomedical research enterprise, a large recipient of nih funding as well as investments from industry and others. we're going to have to create an efficiency that goes to measurable outcomes that are

what patients want and be able to demonstrate that value, and at the same time be able to demonstrate that there's value in the innovations and the commercialization of what we're able to achieve from discovery, and that really hasn't been the space that we've been in. we've been more of an r than r&d research enterprise so we have to partner with industry extensively. >> we have to leave it there. this has been a tremendous conversation, and we thank you for coming on and we have to have you back to continue it. thanks again. [ female announcer ] it's time for the annual shareholders meeting.

♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

what have you what have you learned? >> never get complacent in risk. >> challenge everything. >> what was your first reaction when you were told this much greater problem than we thought? >> a little breathless. i remember telling everyone this is going to be tough. we need people to put on their jerseys, if igit out, help and we'll get through it. we have to run a business. every day people are buying and selling and making loans and trading and we're worried about europe? i'm spending much more time on

this than on europe. we are moments away from the jobless claims and consumer price index. we'll head to a break. as we do, look at the dow futures up about 14 points above the jobs, ahead of the jobs numbers. "squawk" will be right back. they have names like idle time books and smash records

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secondse we're seconds away from jobless claims, cpi and current account data. s rick santelli? the numbers are? >> reporter: first quarter, minus 137.3 billion. that is the worst current account deficit in terms of red ink terms going back to december of '08. but then again so was last month so back-to-back months. if we look at initial jobless claims, they were 377 originally released, then they were revised to 380 and move up 6,000 to 386,000. if we look at cpi on the headline, it was down 0.3. if we strip out the all-important food and energy it is up 0.2.

year over year numbers 1.7 on headline, 2.3 on core and the 1.7 as reflected in the current month definitely dropping to a bit away from the comps our last look at that was 2.3, however, of course, food and energy remaining constant at 2.3. the aftermath of all of this, we're at 160 yield before the data, we're at 160 yield now. we're slightly lower on dow futures and s&p futures, they remain the same. the euro currency, even though europe of course is trying to see if it can find enough life preservers to tether around countries like spain and italy but their currency is still at 125.72. back to you. >> thanks for that, rick. for more steve liesman has been looking at it. >> i don't like the number, in the context of the federal reserve the fed is very much on the fence and i don't know if this could be enough to tip them

over. there was a lot of expectation this number could begin to cool down that perhaps what we were seeing was an echo from higher gasoline prices that softened the economy earlier this month. that does not seem to be the case or if it is still the case we need more time for it to work its way out of the system but 386, joe muttered underneath his breath we're heading towards 400 again, that's a real worried. in the 360, 370 range we're growing 100, 125, maybe 150. toward 380, 400 it's harder to make the case. the fed i think is very much on the fence and i'm gravitating towards the idea they're going to extend twist and provide additional language their finger is closer to the button for additional qe. i don't think they get thereher right now because i don't think the evidence is overwhelming but i think they're going to maybe amp up the language to say you know what? we're close to doing something additionally rather than just extending twist. >> but operation twist doesn't count as additional qe or does

it? >> it is balance sheet neutral if you remember what they're doing is they are selling short term securities and buying long-term. it ends up actually because of certain maturity stuff increasing the balance sheet but it is not adding new reserves wholesale. >> when was, has it been a year? >> it's been a year. >> that would be unbelievable, to actually more balance sheet. that might happen. >> it could happen and needs to be confirmed for the federal reserve. there is a wing of the fomc which says we need to take out insurance. the risk management was underscored in janet yellin's speech, and guys will say i've seen enough and we need to do more, given the fiscal cliff. >> that's a little different than what you've been expecting. did this jobless claims number change? >> you know our friend ian

shepherdson, he tracks the calendar. it's so important. we're tracking weekly data so one day off during the week matters. he's been tracking the numbers relative to 2007 the last time the calendar looked this way and he believes that the calendar is going to work itself out, these numbers will track back down to 360. guess what? it ain't happening. it ain't happening yet. ian has been bullish for a lot of reasons. he's been the guy who thinks the fed doesn't need to do more. i want to underscore the idea that any extension of operation twist is going to be necessarily limited because the amount of short term securities on the books of the fed is limited as well. they have to create new short term stuff. i want to say one thing quickly about tim geithner last night and what's on the front page of the ft. guys can we run that sound we have from tim geithner last night? >> he was trying to keep it together, having a hard time. >> this is the fourth major escalation in the crisis not just that but their response and this is different from the way he's felt before in the sense

thatter there' not minu that they're not minimizing the risks and they're not telling us they feel they have a bunch of time to wait. >> i think i can say andrew and you've been in this position, you've been on the story all week about maybe a big european plan. i've been on this story and unable to get it to the paper. now it's out and i've been hearing what the ft wrote today and i got the other thing which is that contacts have suggested to me germany would not go for this and the ft said france is pushing this plan and germany will not go for this. there is something out there, secretary geithner suggested there is something out there and they're moving with some speed. >> they get it now. >> right, they get it finally but this is as he said -- >> if germany doesn't want to do it -- >> germany would say that any use of the esm for broad european banks would require a change in the constitution and in the treaty of esm because they'd take on liabilities, so

that's when i held back because i didn't believe the germans were on top of it. now the story is out we can say it's out there and what secretary geithner is saying maybe there is something more in the works but i am' not sure i'd be holding my breath. >> we've talked about uncertainty for three years. >> right. >> right, and but just in the last three months, the way europe has sort of come back into the fore in a big way, we have people saying don't buy a stock for another month, just here don't buy a stock. can you imagine some people would not be hiring at this point, thinking i'm just going to see what happens? uncertainty is so thick at this point you can cut it with a knife. >> should we be surprised? >> you have a situation where the, what is it the second biggest economy in the world is europe. they can break apart. there's no certainty they'll stick together. tim geithner is saying when they talk to us they sunday like they want to keep it together. somebody wrote in the "new york

times" a great line, "greece will do to the drachma," not because it's better than the euro but because it's better than barter. and that's what led me excitedly to call for big actions by the imf and i know everybody thinks that's wrong and i feel like we're going to get there eventually because if europe ends up disintegrating the imf will be there in a big way. >> good reporting, thank you. >> thank you. >> coming up viacom's media empire is banking on its growth, ceo philippe dauman is making his way to the "squawk" set right now. undai genesis.

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welcome back to "squawk box," cable giant viacom continues to be a leader in the cable industry and the country credits its growth with continued interest overseas.

joining us is president and ceo of philippe dauman, and also bob kraft and two of his sons. where to start, philippe. believe it or not, i'm going to get to really pertinent information by talking about spongebob. can ratings drop to the extent you've seen or is there a problem measuring? either something happened in cable in the last six months and i'm talking about cnn or you know, name the station, either something happened with viewership or something happened with nielsen. do you believe spongebob story that you're seeing here? >> first of all i want to say how happy i am to be here with my friend bob kraft who is on our board and proud to have his entrepreneurial spirit and winning attitude and jon bon

jovi can attest his rock 'n' roll attitude to the board. spongebob is one of our great iconic characters. >> he is. >> and continues to grow around the world as we export nickelodeon and we have the largest network operator in the world and in the u.s. we have 20% of all viewing on ad-supported cable, about 30% if you look at 12 to 34 and higher than that with young audiences, and we've had a few ratings issues at some of our networks periodically, lately in nickelodeon but that turns, all about the programming ultimately. just this week a new game show called "figure it out" on knick load nickelodeon and it's hitting it out of the park. >> you think there are no measurement issues? >> there are measurement issues for many years and decades there have been issues with a sampling. >> when you get more and more

niche base, more fragmented, are there enough boxes to measure your niche channel? >> no. as technology evolves we need a bezer measurement system and that's clear and our audiences are utilizing multiple devices. >> google knows when i scratch my rear end, why can't we know what people are doing with their tv set. we can. is nielsen got a lock on a ma no pli on not ayou loing all this information to flow? we should know what people are watching instantaneously across the country. >> the technology has got to be there. >> technology is there and technology is also complicated so i think it will be beneficial for nielsen to progress, more measurement entities to emerge and there are many entities around the world. >> do you want operators to get into the business, cable operators like comcast, which owns this network? there's always a big question about that. >> i think competition is

healthy in any domain. it's good for the marketplace and the players in the marketplace, good for companies, good to be pushed by competition, makes you better. >> it's important, you have great content and it would be nice to get paid for the content based on how much is being digested by the public. right? >> i would agree but we do all right. we just went through advertising, we're doing well. we're focused on our content. we invest a lot in content and focus on containing our costs else where. we view it as an investment, good times, bad time, increase investment content in our networks and we have a great operation at paramount, doing extraordinarily well with great franchises and helping us grow around the world. we start new channels. we just launched earlier this year a paramount channel in spain, you've been talking about spain and all the economic difficulties there, but we launched it successfully. one of the most successful

launches ever in spain. >> why do you think that is, when we're watching spain kind of fullall apart? >> people want to be entertained. we launched the first week with "godfather" and "breakfast at tiffanys" and it resonates. >> is it a paid channel? >> it's an ad supported channel, and it's off to a great start. so we're using this time, these times as an opportunity to expand around the world. >> longer term when you think about the business digitally, everyone always talks about cable is going to get cut, the cord's going to get cut and the whole business will get disintermediateiated. what percentage of your business is now digital? >> well it's growing. it's a part of our business but by the way, even in tough economic times we didn't see so much of the cord cutting. recently you've seen growth in subscribers over the last couple quarters in the u.s., but for us, we love competition in any

form, and we love the fact there's satellite, love the fact there's telcos and cable companies and online distribution now. >> we had jon bon jovi on and talking about the music business, disrupted economically in a horrible way, you can make the same argument for newspapers, the same argument for books at some level and some would suggest ultimately it will come to tv. how do you prepare yourself for that, and do you worry about that a lot? >> no, we view it as an opportunity. we are in a period of transition, and we have to live where our viewers live, and they live in a world where they want to be continually connected. we just relaunched a new season of "teen wolf" on mtv, and prior to the launch of the series, 365 days a year we stay connected with them. they had facebook fans, when the show was off air, they tweeted to their fans, so when we relaunched the show, it launched a higher rating than it did last

season so you need to keep this generation connected. they use a second device while they're watching tv. >> do you think the economic model is going to change ultimately? >> well people have the opportunity to spend more time consuming our content. i think it's a great opportunity to see what's happening with mobile devices and we see it right away outside of the u.s. we are able to get into certain countries which do not allow traditional tv entrance from abroad and we've been able to get in through online distribution, through mobile devices, and we've seen competition. we are getting better pricing content because you have net flix, love film and other competitors entering what were previously monopolistic markets. >> it's nice to get there but it's nice to -- >> the economics are improving a lot and we're able to distribute, for example, some of our library content, which in

our case did not have syndication value, the old mtv shows, the old nickelodeon shows we're able to monetize that. so for us it's been an incremental opportunity. we have to manage that, manage when our content appears on what device. if we do that properly and use technology and growing consumption of entertainment around the world to help broad businesses internationally we'll expand as well. >> if the content is good, i worry about the articles some cable operators may drop channels if they're underperforming or maybe eventually you don't pay for all these cable channels, maybe one at a time, ala cart. >> for all the talk about that, the consumer proposition is a great one. you get an awful lot of content if you want to watch business news you get to turn on cnbc, switch the dial to watch mtv or b.e.t. or comedy central.

so the consumers are advantaged by having a lot of choice, and it's a great economic model. at the same time we have to afford them more convenience so we have agreements to have streaming of our networks on a linear basis on ipads and other devices. we have those agreements with time warner cable and cablevision so far and we're working with others. we do make our content available in snackable form or otherwise on mobile devices. so for us it's just an opportunity. we have to make more content, stay in touch, we have to engage our viewers more and more deeply, as technology unfolds. it's very important to do a lot of research in any business, and i understand the new growing milennial generation which is transforming everything. >> can you figure out the network? >> i'm sorry? >> could you solve the network, could you figure out how to bring a network back? >> absolutely. we've done it before. >> a big like one of the big three, like i'm not going to mention any names. do you have the answer to how --

will networks be viable? here we are worried about the cable which replaced the network. >> at the end of the day in our business it's all about creativity, which is easy to say but hard to do. >> hardsay, but hard to do. >> is there someone you look over your shoulder and say, you know what? i'm impressed with what they're doing right now? >> i think our whole industry. >> but you have to admire the whole process. a lot of our competitors are doing a good job. they all come back. it's very hard ko replicate. >> i wouldn't take the bait. i was trying. live sports and news are still obviously that's something -- >> did i do that for you? >> what about like a patriots playoff game?

we had a great time. >> we had a great time, except for cnbc, this year's super bowl had the largest tv audience, you know, 182 million people in the history of television. >> that works, yeah. >> and they come up with some great entertainment products that rival cnbc. >> thank you. >> thanks so much. >> hope to see you again. great to have you on. >> great to be here. when we come back, more from our guest host today. squawk will be right back. ready ready our not, the stoic of the day is coming up. you're watching "squawk box" on cnbc, first in business worldwide.

welcome back to "squawk box." futures have turned back around. when we got the jobless claims that were higher than expected, the dow futures actually sank. they're back up at this point. in our headlines this morning, former billionaire alan stanford could receive one of the longest

white-collar sentences in u.s. history today. this is video of sir alan arriving at a houston courthouse. we're still calling this guy sir alan. he faces up to 230 years in prison for running a $700 million ponzi scheme. prosecutors are urging the judge to give him the maximum. coming up final thoughts after this break. tomorrow on "squawk box," our guest host will be lieu gerstner, the former chairman and ceo of ibm and author of "who says elephants can't dance?" and. and a hectic weekend for the group. they'll weigh in on greece's parliamentary election. don't miss squo"squawk box" stag tomorrow at 6:00 a.m. eastern.

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stock of the day, kroger reporting quarterly profit. that was above estimates, also announcing a new $1 billion share buyback program. earlier, john, we talked about

it offcam are, you used to work for bain, you invested with bain, you worked for bain. >> in the mid 80s. i was with bain & company, in those days they were all together, and from my perspective, mitt's a brilliant manager, quick study, but the thing that is most exceptional about him, as bain capital spun out of the bain & company, the guys he picked to come over were the best, he spots talent and surround himself with brilliant people. when you're president of the united states, the job is so overwhelming, if you don't have highly competent, talented people around you, you don't have anything. i know he's exceptional at being able to do that. i've never met barack obama, so i don't know if he has those skill sets or not. >> he was so -